December 10, 2008 -
The company has a 90 percent market share in Sweden and Norway, and its General brand has dominated those markets for decades.
Swedish Match’s CEO, Lars Dahlgren, says smoking bans and regulations have created more “usage opportunities” for smokeless tobacco products. “And those trends are basically true in the entire world,” he says. “So I think smokeless is a product category with a future.” Because snus is banned in most of the European Union, Swedish Match is preparing to take its product into the North American smokeless market, which is growing rapidly. UBS analyst Nik Modi expects sales of moist snuff to go up 6 to 8 percent a year through 2010.
North America’s largest market, the United States, has a relatively strong smokeless tobacco segment already. Swedish Match’s Red Man brand of chewing tobacco has been popular in the U.S. for decades. Snus differs from traditional American moist snuff because of its preparation process, which is similar to pasteurization and results in a product that is virtually sterile. According to Swedish Match, its own moist products in the U.S. are similar in quality to Swedish snus.
After testing the American waters in a limited deal with Lorillard, Swedish Match can enter the U.S. market with nine different varieties of snus, with different flavors, strengths and blends. The company is well positioned for the move. It spent the past several years restructuring its cigar and lighters operations and making acquisitions that added to the bottom line. Today, the company is in good financial position, unaffected by the world’s current financial volatility, says Dahlgren.
Swedish Match understands that launching a new tobacco product in the U.S. will not be easy in the current social and regulatory climate. The U.S. Congress is expected to give the Food and Drug Administration authority to regulate tobacco products, a move that could result in additional product and marketing restrictions.
While targeting America, Swedish Match continues to keep an eye on Europe, which has kept its doors firmly shut to snus.
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In Process - Swedish Match prepares to put its snus on the U.S. map..
Nik Modi, UBS analyst tobacco remains "economy resilient"..
He pointed out that although tobacco has seen some decline, it is outperforming other staples (such as beverages, food, cleaning products, beauty and personal care), and its decline rate has slipped merely from 2.7% in September 2007 to a 2.4% decline in September 2008. Modi added that with gas prices continuing to fall, the tobacco category "is a good place to be" from an in-store perspective. But the news wasn't all positive for cigarettes. Modi predicted that a federal excise tax increase was a foregone conclusion. "The question is when and how much," he said, adding that it was likely to be seen by the end of March 2009. (SCHIP expansion legislation time to try again.. - Funding for SCHIP lasts through March 2009).
Another opportunity for c-store retailers could come from consumers migrating to other tobacco products (OTP)-with 2009 potentially being a "breakout" year for smokeless growth. According to Modi, the smokeless category continued to show accelerated growth in 2008-with moist smokeless tobacco up 8.2% year-to-date and, as importantly, both premium and nonpremium segments are excelling.
Joe Teller, director of category management for Swedish Match N.A. - in his portion of the presentation - said that continued attention to the Other Tobacco Products (OTP) category from retailers is important for continued growth-particularly since 40% of cigarette smokers try to quit smoking at some point in time, and look for products to satisfy their nicotine urge. "My main theme is that next year I think we need to spend a little bit more time and a little bit more energy and I think what's going to happen is that we're going to get more results," he said.
Reference: Is Tobacco Recession Proof? Smoke, smokeless sales continue strong track despite economic challenges by Linda Abu-Shalback Zid, Consumer Store/Petroleum Daily News, 12/9/2008.
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WHO - Cancer to become world's #1 killer by 2010..
December 10, 2008 - Cancer will become the world's top killer by 2010, in part due to smoking in developing countries, the WHO said. (The Wall Street Journal, 12/10/2008 - hardcopy)
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UK - Strategies to be implemented to prevent underage tobacco use..
Over 96,000 responses were received to the Department of Health's consultation on the future of tobacco control - the largest ever response to a consultation of this kind. (Royal College of Physicians still pushing the use of SNUS..)
Responses overwhelmingly supported removing tobacco displays in shops, and tough action to restrict access to vending machines. Since the ban on tobacco advertising, retail displays in shops are the main way in which tobacco products are marketed to children. These measures will be taken forward in primary legislation through the Health Bill in the next parliamentary session.
Over eight in ten adults in Great Britain who have ever smoked regularly say that they started before they were 19. In England in 2007, nearly 200,000 children aged between 11-15 years of age were regular smokers. These children are 3 times more likely to die of cancer due to smoking than someone who starts in their mid-20s.
From October 2011 large shops will have had to remove all tobacco displays from the point of sales (POP) and smaller business es will have to comply by 2013. Government will work closely with retailers to develop regulations setting out detailed requirements. Where other countries have removed displays smoking prevalence among young people has fallen by up to 10 percent.
The measures to restrict access to vending machines will be brought in by 2011 and monitored to check they are working. If not working, then ministers will consider banning vending machines altogether in 2013. Vending machines are the primary source of cigarettes for nearly one in five young people aged 11 to 15 and children were able to use the machines in more than 40 percent of test purchases. The British Heart Foundation estimates that 46,000 children purchased their cigarettes from vending machines in 2006.
Communication with ASH (Action on Smoking and Health)UK - Alan Johnson is the Health Secretary for the whole of the United Kingdom but because health is one of the policy areas that is devolved to the 4 countries, some aspects of tobacco control are applied differently in the separate jurisdictions. The measures announced yesterday (12/9/2008) will apply to England and Wales but the Scottish parliament is likely to adopt similar measures, and may do so sooner than England.
On smoking in cars when kids are present, there are unlikely to be any further developments until the smokefree legislation is reviewed in 2010.
Reference: Stubbing out recruitment of young smokers, Department of Health, 12/9/2008 and Cigarettes displays in shops will be banned but not until 2013 by Rebecca Smith, Medical Editor, Telegraph,co.uk, 12/9/2008.
Related news briefs: UK Planned Curbs On Smoking to be Axed..; British Considering Ban on Cigarette Displays..; Gruesome Photos on British Cigarette Packs..; Royal College of Physicians still pushing the use of SNUS..; Raise Age to 21 to Purchase Tobacco Products..; Britain to put picture warnings on ALL tobacco products..;
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We must stop the launch of dissolvable tobacco products..
The Camel Dissolvables Products: Sticks (twisted) can be placed in the mouth like a toothpick or broken into a pieces that are placed between the upper lip and gum, where they dissolve after 10 minutes; Orbs, which is a pellet (like placing a candy in your mouth) that lasts about 15 minutes and film Strips for the tongue, which dissolve after about 3 minutes. Flavors - Strips will come in fresh mint flavor and Sticks in Mellow; Orbs will be available in both flavors. Camel Dissolvables deliver between 0.6 to 3.1 milligrams of nicotine, while cigarette smokers typically inhale about 1 mg per cigarette.
Once the sales start it will already be too late. Kids are going to think this is the coolest stuff; they can use it at any time, no one will ever know and it will derive pleasure and make coping with life-stresses easier. You can't reason with your child to stop because you'll never know until it's too late. They'll rationalize "Everyone does it" - "No one will know" - "Who's going to find out?".
Teenagers are infamous for being on the cutting edge of current fads and trends. The reason why teens are on the lookout for something new and different is almost a given: they are working on their identity. Your teen wants to identify with something that makes him/her feel good about him/her self - the silent killer tobacco.
Only problem after using this stuff for a few times - our kids our future leaders soon will be addicted to nicotine for their whole life. So the child you've tried so hard to make the very best becomes a nicotine addict never able to reach his/her full potential. There are many adverse effects that occur with nicotine but one of the major ones is that it interferes with the adolescent brain development.
Tobacco harm reduction proponents think these products are a good option not considering our primary focus - our kids. For example, Bill Godshall, the executive director of SmokeFree Pennsylvania., "I'm pleased that Reynolds is being aggressive in accelerating the switch to smokeless tobacco and getting more products that are likely to appeal to tobacco users." (Reynolds moves to be on top when smoke clears by By Richard Craver, Winston-Salem Journal, 10/8/2008)
Now is the time to step forward and STOP the release of these products.
Companion news brief: STOP - the Proliferation of Flavored Tobacco Products..
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